According to Dr Murtaza Syed, deputy governor of the State Bank of Pakistan (SBP), Pakistan would probably reach its 5-7 per cent inflation target by the start of the following fiscal year because of a positive base effect and ‘tighter’ macroeconomic regulations.
According to Dawn, the SBP deputy head said that inflation in Pakistan quadrupled from 13–14 per cent to around 25–27 per cent since June as a result of an increase in POL costs during a Zoom session hosted by the World Bank.
Although Pakistan does have an issue with inflation, it has lately started to decline and showed a “greater than expected” decline in the past month, he noted.
Dr Syed claims that inflation has “kind of crested” and will begin to drop for the remainder of the year.
The SBP deputy chief also referred to worries over Pakistan’s economic outlook as “exaggerated” and claimed that Pakistan was at least $10 billion over-financed as a result of inflows from friendly nations and pledges made by development partners in the wake of floods.
According to a central bank official, Pakistan needed about $31 billion in external financing, but had $37 billion in accessible funding, which was $6 billion more than it needed. The recent floods, he said, “may have some effects on the current account deficit, but this is before taking into account the floods.”